Funding shortfalls are preventing immigration officials in at least one region from detaining aliens.

The U.S. Immigration and Customs Enforcement bureau is releasing some criminal aliens from federal custody in five southern states because it cannot afford to detain them, according to documents obtained by Government Executive.

The decision, which affects aliens held in Tennessee, Alabama, Arkansas, Louisiana, and Mississippi, was made by regional ICE managers in response to an agency budget directive issued last week, according to ICE spokesman Russ Knocke.

In an internal e-mail dated June 15, James Mounce, an ICE detention official in Memphis, Tenn., said budget shortfalls forced the new procedures. "Over the past month-plus, [Detention and Removal] has, as have all the [offices] in ICE, been dealing with budgetary problems," he wrote colleagues. "Here it is in a nutshell . . . We are BROKE."

Knocke said Mounce's characterization was "unfortunate" and "inaccurate." He stressed that the new detention policy was set by officials in ICE's New Orleans district, which encompasses the five states, and may not apply to other regions of the country. "My impression is that New Orleans is a somewhat unique circumstance," he said.

Under the new district policy, aliens charged with misdemeanors, such as simple assault, are being released with orders to appear at deportation hearings. Illegal immigrants that by law must be detained-including aliens charged with aggravated felonies and those who have received final deportation orders-are still being held in federal or local jails.

"They raised the bar for detention," said an ICE agent in the New Orleans district, who spoke on condition of anonymity for fear of retribution. "We used to have the discretion; as long as the alien was illegally in the United States and they committed a misdemeanor or a felony, we could detain them."

The shift in detention policy is the latest indication of how possible budget and accounting troubles could be affecting operations at ICE, a Homeland Security Department agency charged with detaining and removing illegal aliens, among other missions. Last week, Rep. Jim Turner, D-Texas, said ICE was in danger of violating laws against overspending its budget. Told of Mounce's e-mail, Turner said in a statement that he "continues to be alarmed that ICE's financial management system may be impacting the ability of agents to keep our communities safe."

Knocke said the policy switch should be seen in the context of ICE's broader efforts to detain certain illegal immigrants, while using alternatives to detention to keep tabs on others. The agency is budgeted to detain 19,444 illegal immigrants, but typically holds 3,000 additional aliens, he said. As a result, the agency makes daily decisions on how many aliens it can afford to detain, he said. "We will ensure that no one who presents a risk to a community or national security will in fact be released," he added.

Other officials said ICE has to reduce the number of aliens it is holding to comply with its budget limits. "They've been running at 22,000, 23,000 [aliens] every day, so that is tens of millions of dollars more than they are funded for," said a senior Homeland Security official. "You need to start managing those numbers down."

On Monday, ICE began an alternative detention program in eight cities: Baltimore; Portland, Ore.; Miami; St. Paul, Minn.; Denver; Kansas City; San Francisco; and Philadelphia. The program, which is run by a contractor, Behavioral Interventions, Inc. of Boulder Colorado, uses electronic monitoring and home visits to keep tabs on aliens not held in ICE custody. It is designed to monitor 1,600 aliens in the eight cities.

The New Orleans policy already has frustrated some detention officials, who have had to release aliens they believe should be detained. "Many of these aliens have extensive criminal histories," said the ICE agent. The agent fears more operational cutbacks before the end of the fiscal year. "And to think, we still have over three months left in fiscal 2004," he said.

In his June 15 e-mail, Mounce said detention officials would start "reviewing the docket to determine if there are cases eligible for [own recognizance] release." When aliens are released on their own recognizance, they are not required to post bond before leaving federal custody, according to David Jones, a partner with the Memphis law firm Siskind Susser.

It is unclear whether the detention procedures adopted in ICE's New Orleans district are being followed in any of its 21 other detention districts around the country. Another ICE source said other districts have implemented similar procedures to deal with budget shortfalls, but Knocke would not confirm this. Knocke added that the New Orleans district has a relatively high number of aliens that by law must be detained, meaning that officials there may have to release some accused of less serious offenses.

Knocke said last week's budget directive from ICE headquarters was a "routine" effort to emphasize sound budget procedures in the detention branch. The directive, which was communicated to ICE district officials during a phone conference, was to "manage within budget, preserve the integrity of the immigration enforcement system, and under no circumstance release anyone who was a threat to public health and safety," Knocke said.

In his e-mail, Mounce said he had "no idea how long these detention rules will be in effect" in the New Orleans district. Knocke would not speculate on the lifespan of the new rules, but said ICE would "continue managing within the budget that we've been provided by Congress in this fiscal year."

In a related development, the Homeland Security Inspector General has agreed to audit ICE's financial practices, according to Moira Whalen, minority spokesperson for the House Homeland Security Committee. Turner requested the audit in a letter last week.